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Member Alert to Control High-Risk Merchants (MATCH)

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When acquiring banks and transaction processors terminate contracts
with merchants for certain risk-related reasons, the merchant
businesses and their owners end up on a list called the Member Alert to
Control High-Risk Merchants (MATCH). Acquirers must consult the MATCH
list before contracting with a prospective merchant, and if there is a
possible “MATCH match,” the acquirer must verify the merchant’s identity
and contact the listing member directly to determine why the merchant
was added to the list.

Today, the MATCH program is maintained by MasterCard International
and used by both Visa USA and American Express. Occasionally, some
people will refer to this list by its old names, the Combined Terminated
Merchant File (CTMF) or Terminated Merchant File (TMF).

Specific listing causes

Many Independent Sales Office (ISO) and Merchant Level Sales (MLS)
still have an incorrect or incomplete notion of what a MATCH designation
means. The first thing it means is that the listed merchant committed
one or more specific acts that convinced the acquiring bank or processor
that the acceptable level of risk had been exceeded.

The disqualifying acts include:

Excessive chargebacks due to merchant business practices or procedures

Excessive deposits for transactions unauthorized by cardholders

Credit or debit card fraud conviction

Excessive deposits for counterfeit transactions

Deposits for transactions involving sales of goods or services generated by another merchant (“laundering” or “factoring”)

Suspicion that the merchant is conducting fraudulent activity

Acquiring banks and processors may conduct an internal audit or
investigation of a contracted merchant, too. If they have reason to
believe that ongoing violations of the merchant agreement may result in
increased losses, they can abrogate the contract at that time.

Notification vs. Investigation

Acquirers are supposed to add terminated merchants to the MATCH list
as soon as possible. In practice, this means no later than the end of
business on the day after the merchant is notified that its contract is
being terminated.

The fact is, the MATCH list is accessed much more for investigating
new merchant account applications than it is for reporting felonious
merchants. Whenever an acquiring bank or credit card processor considers
a merchant account application, a name check is done with the MATCH
system.

Because of the proliferation of common business names, as well as
names of the company principals, an inquiry to the MATCH system can
generate many possible listings from all over the world. These may or
may not refer to the particular merchant (or principal) being checked.
The inquiring firm should always base its acceptance decision on
first-hand investigation, using the MATCH data merely as a starting
point in the process.

Acquirers and processors are required to contact listing members to
learn why they added a particular merchant to the list. The inquiring
party, at the very least, will want to know why the processor listed the
merchant on MATCH and if there was an associated loss.

The listing member is encouraged to tell the inquiring member, with
all candor, why the merchant was terminated. Merchants will often be
placed on the list for technical violations of their agreements, or
perhaps for several chargebacks that did not cause the processor a loss.
When discussing some of these listings, processors occasionally admit
to acting “hastily” or allow as how the merchant was “not so bad after
all.”

Life after MATCH listing

A popular myth holds that, once a merchant is placed on the MATCH
list, it is blacklisted and will never be able to use another processor.
However, the MATCH list is set up as an identification system, logging
merchants and principals terminated for specific reasons. Card
association rules do not prohibit signing up merchants or principals who
are on the MATCH list.

The acquirer-member that added a merchant to the MATCH list is the
only entity that can request deletion of that specific listing.
Additionally, any member that improperly or incorrectly lists a merchant
on MATCH is required to request correction or deletion of the file
immediately on learning that an error has been made.

The MATCH system is an imperfect yet important part of the
information base that allows banks and credit card processors to share
important merchant information. However, it is only as useful as it is
accurate, so care must be exercised in how merchants and principals are
listed. There is no advantage to anyone, merchants or processors, in
having inaccurate data being used to make important financial decisions.

MerchantWarehouse.com is a registered ISO/MSP of the following banks: US Bank-Minneapolis MN, National Association Buffalo, NY.MerchantWarehouse.com is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, CA. American Express requires separate approval.